Rampulla added that some clients will still prefer to be served with face-to-face advice, especially on personal issues, but that “being able to do both is definitely a plus from a competitive advantage perspective.”

Advisors are going to have to find ways to be more engaging in their virtual interactions, said Rampulla, or clients and prospects will tune them out, or even move to another provider.

He cited data from a recent Vanguard study showing that 87% of retail investors have received some level of support virtually, with most (90%) saying video conferences and meetings with advisors was “as good or superior” to other modes of meeting and communicating. And 30% said that they would want to keep most of their interactions virtual.

“You’ll see a shift to virtual, and we’re all going to have to make that shift,” said Rampulla.

Most of this shift was already underway, said Buckley, but it was accelerated by Covid-19.

Rampulla added that Vanguard is working on a new business-to-business application of its digital advice offering, which allow advisors to offer their clients the power of a Vanguard roboadvisor to their clients for the first time. The company has been piloting this new platform over the past six months with “a couple dozen” advisory firms.

“We’ve built our digital business to scale,” said Rampulla. “We’re taking the technology of that platform and rearchitecturing it so we can make it available to you, our clients.”

Rampulla added that Vanguard has no designs to get directly into the RIA custody business at this time.

The Road Ahead
Buckley and Rampulla also outlined Vanguard’s mid-year market and economic outlook. The firm expects the recovery from this point to be proteracted and slow, with GDP growth not returning to its normal long-term trend until “well into 2021.”

“I think we’ll see a two-phase economic recovery, and we’re already well into phase one,” said Buckley. Phase one includes the gradual reopening of storefronts, restaurants and other businesses in limited capacity—which will prevent many small businesses from making a profit. “Phase two recovery is when you actually start to see demand start to surge. We believe that fear is going to prohibit a full recovery.”

Vanguard expects a 15% chance of an upside surprise like an earlier-than-expected widely available vaccine or herd immunity or successful new therapeutic treatments that mitigate long-ter  health outcomes.

On the other hand, there’s a 35% chance of a downside risk coming to fruition, including resurgence of the virus requiring additional shutdowns, a mutation into more virulent forms, or delays in the development of vaccines, he said.